Correlation Between Enea AB and Exsitec Holding

Can any of the company-specific risk be diversified away by investing in both Enea AB and Exsitec Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Enea AB and Exsitec Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enea AB and Exsitec Holding AB, you can compare the effects of market volatilities on Enea AB and Exsitec Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Enea AB with a short position of Exsitec Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enea AB and Exsitec Holding.

Diversification Opportunities for Enea AB and Exsitec Holding

-0.86

Correlation Coefficient

Enea AB  Exsitec Holding

Pay attention - limited upside

The 3 months correlation between Enea and Exsitec is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Enea AB and Exsitec Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exsitec Holding AB and Enea AB is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Enea AB are associated (or correlated) with Exsitec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exsitec Holding AB has no effect on the direction of Enea AB i.e., Enea AB and Exsitec Holding go up and down completely randomly.

Pair Corralation between Enea AB and Exsitec Holding

Assuming the 90 days trading horizon Enea AB is expected to generate 1.21 times more return on investment than Exsitec Holding. However, Enea AB is 1.21 times more volatile than Exsitec Holding AB. It trades about 0.02 of its potential returns per unit of risk. Exsitec Holding AB is currently generating about 0.01 per unit of risk. If you would invest  9,270  in Enea AB on October 12, 2024 and sell it today you would earn a total of  1,050  from holding Enea AB or generate 11.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Enea AB  vs.  Exsitec Holding AB

Enea AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enea AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enea AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Exsitec Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exsitec Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Enea AB and Exsitec Holding

The main advantage of trading using opposite Enea AB and Exsitec Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enea AB position performs unexpectedly, Exsitec Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Exsitec Holding will offset losses from the drop in Exsitec Holding's long position.

The idea behind Enea AB and Exsitec Holding AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.